A BILL TO BE ENTITLED
AN ACT to reduce and eliminate the tax credits for cigarette exportation.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 105‑130.45(c) reads as rewritten:
"(c)	Cap. – The credit allowed under this section may not exceed the lesser of three million dollars ($3,000,000) or fifty percent (50%) of the amount of tax imposed by this Part for the taxable year reduced by the sum of all other credits allowable, except tax payments made by or on behalf of the taxpayer. This limitation applies to the cumulative amount of the credit allowed in any tax year, including carryforwards claimed by the taxpayer under this section for previous tax years. Any unused portion of a credit allowed in this section may be carried forward for the next succeeding five years."
SECTION 2.  G.S. 105‑130.45(b) reads as rewritten:
"(b)	Credit. – A corporation engaged in the business of manufacturing cigarettes for exportation to a foreign country and that waterborne exports cigarettes and other tobacco products through the North Carolina State Ports during the taxable year is allowed a credit against the taxes levied by this Part. The amount of credit allowed under this section is determined by comparing the exportation volume of the corporation in the year for which the credit is claimed with the corporation's base year exportation volume, rounded to the nearest whole percentage. In the case of a successor in business, the amount of credit allowed under this section is determined by comparing the exportation volume of the corporation in the year for which the credit is claimed with all of the corporation's predecessor corporations' combined base year exportation volume, rounded to the nearest whole percentage. The amount of credit allowed may not exceed three million dollars ($3,000,000) and is computed as follows:
Current Year's Exportation	Amount of Credit
Volume Compared to its	per Thousand
Base Year's Exportation Volume	Cigarettes Exported
	120% or more	40¢
	119% – 100%	35¢
	99% – 80%	30¢
	79% – 60%	25¢
	59% – 50%	20¢
	Less than 50%	None"
SECTION 3.  G.S. 105‑130.46(d) reads as rewritten:
"(d)	Credit. – A corporation that satisfies the employment level requirement under subsection (b) of this section, is engaged in the business of manufacturing cigarettes for exportation, and exports cigarettes and other tobacco products through the North Carolina State Ports during the taxable year is allowed a credit as provided in this section. The amount of credit allowed under this section is equal to forty cents (40¢) per one thousand cigarettes exported. The amount of credit earned during the taxable year may not exceed five million dollars ($5,000,000)."
SECTION 4.  G.S. 105‑130.46 is repealed.
SECTION 5.  G.S. 105‑130.45, as amended by this act, is repealed.
SECTION 6.  Section 1 of this act is effective for taxable years beginning on or after January 1, 2004.  Section 2 of this act is effective for taxable years beginning on or after January 1, 2005.  Sections 4 and 5 of this act are effective for taxable years beginning on or after January 1, 2007.  The remainder of this act is effective when it becomes law.